Welfare As We Know It Page 14

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MTA keeps 10th Avenue station hopes alive P. 7 | Is eminent domain imminent? P. 9 | The Big Cheese of Bleecker Street P. 12

® APRIL 4-10, 2016 | PRICE $3.00 NEW YORK BUSINESS

the end of THE END OF WELFARE AS WE KNOW IT PAGE 14

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APRILCRAINS 4-10, 2016

FROM THE NEWSROOM | JEREMY SMERD Lights, camera, action! IN THIS ISSUE 4 AGENDA

WEST SIDE STORY is a classic New York tale spun by 5 IN CASE YOU MISSED IT quintessential New Yorkers. But when Leonard Bernstein 6 WHO OWNS THE BLOCK and Stephen Sondheim’s Broadway hit became a movie, it 7 TRANSPORTATION came to exist as a piece of New York in name only as much of The great boom 8 ASKED & ANSWERED in retail jobs the film was shot at Samuel Goldwyn Studios in California. comes to an end. 9 REAL ESTATE What went In the 20th century, Hollywood beckoned New York’s wrong? 10 creative class, while Broadway endured because there is no VIEWPOINTS real substitute for live theater. Those who left for L.A. never 11 THE LIST ceased to draw on Gotham’s gritty FEATURES streetscape, but if they returned it was to film an exterior. We’re launching In 2004, New York, like other states, started offering a 12 FOOD film tax credit to resuscitate the industry. Though similar Crain’s Entertainment 14 COVER STORY credits have been criticized as giveaways with little to cover—without fear or 20 GOTHAM GIGS economic benefit, New York’s quickly proved to be the favor—the business of 21 SNAPS exception. That’s because the city always has had the talent 22 FOR THE RECORD and moviemaking infrastructure; it just didn’t have the Broadway, film and TV economic edge. Now it does, and the industry is booming. 23 PHOTO FINISH Film and television employment has climbed more than 53% since 2004, and economic activity generated annually is nearly $9 billion, up from $4.6 billion a dozen years ago. Most New Yorkers see the industry only when a shoot on their block forces them out of their way as they try to get home. But that tension is overblown. Out of a quarter-million complaint calls to 311 in February, only 52 were related to filming. That’s why we’ve decided to shine a spotlight on the industry by launching a weekly newsletter. Crain’s Entertainment will cover—without fear or favor— the people, companies, politics and policies behind the lights, camera and P. 21 action. Crain’s Entertainment will focus on the organizations that fuel film, television and Broadway productions and the many businesses and communities in the five boroughs touched by them. To sign up for it, go to CrainsNewYork.com/entertainment. Reporter Addie Morfoot will lead our efforts. She joins us having covered the industry for a dozen years for Variety, The New York Times Magazine and The Wall Street Journal. Crain’s Entertainment will no doubt unearth great stories, insight and actionable information. It also will offer valuable context for the complex policy and heated political debates that will no doubt occur, especially when the state’s film tax credit comes up for renewal in 2019, and CEOs like Hal Rosenbluth of Kaufman Astoria Studios make their pitch for extending it. “This industry is diversifying the INSIDE P.12 economy … promoting tourism and generating 130,000 jobs,” he said. “This PHOTO: BUCK ENNIS industry is one of the pillars of the city.” Crain’s will be there to cover it.

DIGITAL DISPATCHES CONFERENCE CALLOUT MAY 2 Go to CrainsNewYork.com CRAIN’S REAL ESTATE READ Time Inc. sold This Old House to Eric CONFERENCE Thorkilsen, the executive who created the home-renovation media brand. Thorkilsen part- Join Sen. Charles Schumer, nered with New York-based private-equity fund Related Cos. Chairman Stephen Ross TZP Growth Partners. (pictured), former Deputy Mayor Dan Doctoroff and others for a discussion ■ A federal judge of the key issues facing the building overturned a govern- industry, including the future of the ment decision to 421-a tax break and Penn Station. classify MetLife > SHERATON NEW YORK as a “systematically TIMES SQUARE important financial institution,” meaning 8 a.m. to noon the firm is exempt [email protected] from the “too big to fail” rules that regu- Vol. XXXII, No. 14, April 4, 2016—Crain’s New York Business (ISSN 8756-789X) is published weekly, except for double issues late giant banks. the weeks of June 27, July 11, July 25, Aug. 8, Aug. 22 and Dec. 19, by Crain Communications Inc., 685 Third Ave., New ■ York, NY 10017. Periodicals postage paid at New York, NY, and additional mailing offices. Postmaster: Send address changes Congratulations to Crain’s reporter Aaron to: Crain’s New York Business, Circulation Department, 1155 Gratiot Avenue, Detroit, MI 48207-2912. Elstein, whose “Dark Times for Diners” story For subscriber service: Call (877) 824-9379. Fax (313) 446-6777. $3.00 a copy, $99.95 one year, $179.95 two years. won the Jesse H. Neal Award for Best Article. (GST No. 13676-0444-RT)

APRIL 4, 2016 | CRAIN’S NEW YORK BUSINESS | 3 20160404-NEWS--0004-NAT-CCI-CN_-- 4/1/2016 6:38 PM Page 1

AGENDAWHAT’S NEW APRIL 4, 2016 New York is the best city in the world, no matter what the surveys say

ew York, according to the latest U.S. News & World Report ranking, is the 96th best big city in the U.S. The New York Post’s take on the list was “Get the hell out of NYC while you can.” Funny thing is, more people are trying to get into Nthe city than ever. The five boroughs last year were home to 8.55 million people, according to census data released last month. The 0.6% increase from 2014 continued a long run of annual gains. It raises the question: If New York WORSE THAN THIS? City’s quality of life is so low, why do so many people want to be here? Bakersfield, The premise of the question, of course, is false, because the ranking’s Calif., ranked methodology is arbitrary and contradictory. High housing costs drove 95th, one spot ahead down the city’s score, but housing is expensive largely because it’s in of the city. high demand. If the quality of life were terrible, people would be leaving and property values would fall. Remember the 1970s? Forget the rank- on students’ college readiness without accounting for demographics. ings—Americans are voting with their feet. New Yorkers also grade harshly on customer satisfaction surveys. That Aspects of New York City living that would lift its rankings were hurts the city’s happiness index metric—a piece of the total ranking. New missing from the list’s methodology. Parents Yorkers are probably happier than, say, North here spend a lot less time schlepping their kids If the quality of life were so Dakotans, but are loath to admit it. Perhaps around because young people can walk, bike or we’re only happy when we’re complaining. take mass transit by themselves, but that count- terrible, people would be However flawed the U.S. News formula may ed for nothing. Instead, U.S. News dinged the leaving and property values be, the city should strive to improve on some of city for its average 40-minute commute, ignor- would be falling. They’re not its metrics. We should lift college readiness. ing the benefits of getting to work without driv- We’re the safest big city in America, but crime ing. The fact that New Yorkers can get by with- rates on par with the list’s smaller municipalities out a car—saving about $7,000 annually on transportation—also was not would be better. Utility costs are high partly because our underground factored in. Indeed, proximity to transit hurt the city’s score because infrastructure is expensive to maintain, but they could be lower. And we housing near train lines costs more, all else being equal. And nothing could certainly build more housing. Still, any list that ranks New York measured immigrants’ opportunity to thrive, a New York hallmark. 96th among cities, well behind places whose residents would love to Our schools got low marks from U.S. News because they were judged move here, is flawed by definition. – THE EDITORS

FINE PRINT Attention, startups: The SEC is watching you. More than 150 VC-backed companies are “unicorns,” or claim they’re worth more than $1 billion. SEC Chairman Mary Jo White drew attention to the hype last week, saying there is evidence that the prestige associated with sky-high valuations drive companies to appear more valuable than they are. “The tail may wag the horn,” she said, calling all the bluster an “area of concern.”

BY GERALD SCHIFMAN STATS 25 WORDS OR LESS TRAIN DELAY THE LONG ISLAND RAIL ROAD’S ridership is We need real ticking up, but so are delays—and that’s CITY AND THE “ hurting the economy. guarantees that a Total LIRR customers in 2015, a national high for commuter railroads company will not 87.6M and a 2.1% increase over 2014 flip a property and Loss in economic productivity in use it for private the past year owing to late, can- gain when they’ve $106M celed and terminated LIRR trains Total rider-hours lost to LIRR delays made a commit- in the past year, a 20.3% increase ment for some 1.85M compared with the previous year public usage Average number of hours lost per person to LIRR delays in the past year, a 19.5% — Bill de Blasio, on Allure Group’s 20.7 increase compared with the year before Lower East Side nursing-home sale NOTE: Current-year economic impact data spans from July 2014 to June 2015

AP, BUCK ENNIS ADDICTED TO NUMBERS? GET A DAILY DOSE AT @STATSANDTHECITY SOURCE Tri-State Transportation Campaign, MTA

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AGENDA ICYMI CRAINS EDITOR IN CHIEF Rance Crain publisher, vp Jill R. Kaplan assistant to the publisher Alexis Sinclair, 212.210.0701 The circus is back in town EDITORIAL editor Jeremy Smerd assistant managing editors Erik Engquist, ome one, come all, to the greatest show around: Peter S. Green web editor Amanda Fung New York’s presidential primaries, competitive for copy desk chief Steve Noveck art director Carolyn McClain both parties for the first time in memory. New photographer Buck Ennis C senior reporters Joe Anuta, Aaron Elstein, Yorkers are in for a circus leading up to the April 19 elections. Matthew Flamm, Daniel Geiger Hillary Clinton reporters Rosa Goldensohn, needs to win and win big in her adopted home Jonathan LaMantia, Caroline Lewis, state. She kicked off her primary rounds here in Harlem and Addie Morfoot data reporter Gerald Schifman then headed upstate, working her base of black voters, older women and moderates, while Mayor Bill de Blasio, web producer Peter D’Amato columnist Greg David who ran Clinton’s first Senate campaign in 2000, was on the radio last week defending her environmental contributing editors Tom Acitelli, Theresa Agovino, Barbara Benson, record. Erik Ipsen, Judith Messina, Cara S. Trager Bernie Sanders will put up a fight on the ground, hoping high voter turnout will tilt the result his way. He ral- ADVERTISING lied 18,500 people in the South Bronx last week, according to his campaign, and his field operation may get a www.crainsnewyork.com/advertise advertising director Irene Bar-Am shot in the arm from the state’s activist Working Families Party, says veteran Democratic strategist Hank [email protected] or 212.210.0133 Sheinkopf. senior account managers Zita Doktor, Jill Bottomley Kunkes, Rob Pierce, The primary will test the Working Families’ turnout machine, Sheinkopf said, and could hurt Clinton even Stuart Smilowitz if she wins. “If it’s close, that’s a real problem for her,” he said. “This should be a walkaway.” account managers Jake Musiker senior marketing coordinator Donald Trump’s name may be plastered across Manhattan in oversize brass letters on ice rinks and apartment LeAnn Richardson sales/events coordinator Ashlee Schuppius buildings, but Trump’s appeal in cosmopolitan New York City is thin. He’s likely to spend his time outside the 212.210.0282 [email protected] city with upstate allies, including his early backer in Buffalo, real estate developer and 2010 gubernatorial can- ONLINE Carl Paladino general manager Rosemary Maggiore didate . The Amazing Donald holds a jaw-droppingly unfavorable rating of 74% among likely city 212.210.0237 voters. [email protected] CUSTOM CONTENT Texan Ted Cruz, whose only appeal to New York Republicans is that he’s not Trump, is likely to head upstate, director of custom content Patty Oppenheimer 212.210.0711 too, and possibly waltz by Wall Street (his wife, Heidi, is a former Goldman Sachs executive). Ohio’s John Kasich [email protected] will try to skim the moderates Trump loses, and has already made an appearance near Trump’s old Howard EVENTS www.crainsnewyork.com/events Beach stomping grounds. But he’s been caught eating pizza with a fork. — ROSA GOLDENSOHN director of conferences & events Courtney Williams, 212.210.0257 [email protected] manager of conferences & events Budget deal clinched on wages, family leave DATA POINT hip-hop mogul claims that Norwegian Adrienne Yee Gov. Andrew Cuomo and state legisla- BETWEEN 2000 AND 2014, THE media company Schibsted ASA over- AUDIENCE DEVELOPMENT tors struck a budget deal that will raise stated Tidal’s subscriber base when it director of audience & content NUMBER OF NEW YORKERS partnership development the minimum wage to $15 in the city sold him the company for $56 million. Michael O’Connor, 212.210.0738 by the end of 2018—and in the rest of WORKING IN THEIR HOME Despite replacing top management [email protected] state by 2021—and grant New Yorkers several times in the past year, Tidal has CRAIN’S 5BOROS BOROUGH GREW BY 40%, www.5boros.com 12 weeks of paid family leave. New had difficulty attracting new users and Irene Bar-Am, 212.210.0133 York became the second state, behind ACCORDING TO THE CENTER FOR competing with Spotify and Apple. [email protected] California, to boost pay. The deal was SPECIAL PROJECTS AN URBAN FUTURE reached minutes after the Thursday Popemobile sold manager Alexis Sinclair 212.210.0701 [email protected] midnight deadline, officially making The Fiat 500 Lounge Hatchback used REPRINTS for a late budget. Cuomo had champi- to ferry Pope Francis around the Big reprint account executive Krista Bora 212.210.0750 oned his ability to pass on-time budg- they’re released, in an effort to ensure Apple during his tour last year was sold PRODUCTION ets during his term. those who need it have a care plan at auction. The winning bid was not production and pre-press director once they are free. Many sick or men- announced, but at one point the top Simone Pryce media services manager Nicole Spell Budget spares CUNY, Medicaid tally ill inmates fail to get follow up offer was $300,000. Proceeds will aid SUBSCRIPTION CUSTOMER SERVICE Gov. Andrew Cuomo reversed course care. Federal approval is still needed Catholic schools and charities in www.crainsnewyork.com/subscribe on his plan to have the city shoulder a for the plan. the city. – AMANDA FUNG [email protected] 877-824-9379 (in the U.S. and Canada). larger share of expenses for Medicaid $3.00 a copy for the print edition; or $99.95 and the City University of New York. ‘Sham’ charities one year, $179.95 two years, for print subscriptions with digital access. The state Department of Health will Two cancer charities agreed to pay to contact the newsroom: work with localities statewide to lower $75.8 million to settle fraud charges. www.crainsnewyork.com/staff unnecessary Medicaid spending, The settlement revealed that Cancer 685 Third Ave., New York, NY 10017-4024 phone: 212-210-0100 fax: 212-210-0799 which could have cost the city as Fund of America and Cancer Support Entire contents ©copyright 2016 much as $190 million next fiscal year. Services funneled $187 million in Crain Communications Inc. All rights reserved. ®CityBusiness is a registered CUNY, which Cuomo threatened with donations toward salaries, cars and trademark of MCP Inc., used under license cuts of as much as $485 million, or a other luxuries. agreement. third of the state’s share of its $3 billion CRAIN COMMUNICATIONS INC. Replacing Rikers Hamilton faux pas BOARD OF DIRECTORS budget, was spared the ax, but was chairman Keith E. Crain blocked from a proposed tuition raise. The city is reportedly exploring pro- The Broadway smash Hamilton president Rance Crain posals to relocate Rikers Island inmates faced a rare backlash when it posted treasurer Mary Kay Crain, Cindi Crain executive vp, operations William Morrow Silver disbarred into renovated borough detention a casting call on its website seeking executive vp, director of strategic Former Assembly Speaker Sheldon centers and two new jails in the city. “nonwhite men and women, ages operations Chris Crain executive vp, director of corporate Silver, 72, has been stripped of his law The move is a change from the mayor’s 20s to 30s.” The language is operations K.C. Crain license. He’s due to be sentenced April initial response to a call to shut down common and legal in theater, but senior vp, group publisher David Klein vp/production, manufacturing David Kamis 13 after his conviction on a $5 million Rikers. He had said then it was a producers forgot to include a chief financial officer Thomas Stevens corruption charge. “noble concept” that would not work standard disclaimer to encourage all chief information officer Anthony DiPonio because it would “cost many billions.” types of performers to try out. founder G.D. Crain Jr. [1885-1973] Medicaid for prisoners chairman Mrs. G.D. Crain Jr. [1911-1996] Producers quickly said the call will secretary Merrilee Crain [1942-2012] State legislators set aside $5 million to Jay Z ripped off? be amended, but noted its cast will let prison inmates connect with Jay Z is going after the previous owners remain diverse.

NEWSCOM Medicaid health services before of music-streaming service Tidal. The

APRIL 4, 2016 | CRAIN’S NEW YORK BUSINESS | 5 20160404-NEWS--0006-NAT-CCI-CN_-- 4/1/2016 6:39 PM Page 1

AGENDA WHO OWNS THE BLOCK REAL ESTATE

193 HENRY ST.

Music man makes a real estate play Delancey Street project prompts movement on Lower East Side

BY TOM ACITELLI

t the end of February, Daniel Wise, a music producer based on Delancey Street on the Lower East Side, filed plans with the city to demolish a Aslender, four-story commercial structure at 193 Henry St. and replace it with a seven-story, five- unit apartment building. The property had 205 HENRY ST. housed the Mount Zion Church of Christ until 205 Henry Tower Inc. bought the 10,535-square- 2012, and has sat vacant since. foot commercial and residential building for $1.5 Wise—a former touring musician whose stu- million in July 2011. A month later, the new owner dio’s client roster has included John filed plans to build a seven-story, 10-unit apartment building. Demolition work began in October. Mayer, the New York Dolls, Run- 201-203 EAST BROADWAY The Buildings Department issued a stop-work D.M.C. and Ani DiFranco—purchased order in June 2015 after finding multiple viola- 193 Henry in August 2015. That was the An LLC controlled by Daniel Wise bought these tions, including cement spilled on a nearby bal- neighboring buildings in August 2015 from the cony. The order remains in effect. same month he bought two buildings United Hebrew Community of New York, which had diagonally behind it. He is converting used them as headquarters for its burial service. The those adjacent structures, 201 and 203 purchase price was $8.5 million for a total of East Broadway, into modular apart- 15,212 square feet. Wise obtained a demolition per- mit for both buildings in September and plans 10 ments. Despite the February filings, the modular apartments on the site, stacked on top of fate of 193 is unknown. Wise—who also commercial space that will include medical offices. has worked with record companies EMI, Sony and Geffen—did not respond to requests for comment, and his conversion plan is still pending. Wise had put the Henry Street building on the market for $5.5 million through brokerage firm Eastern Consolidated shortly after buying it. The listing emphasized the building’s redevelopment potential and its proximity to the Essex Crossing mixed-use project, which is expected to cover more than five blocks between Delancey and Grand streets and include 1.9 million square feet of residential, commercial and community space. “Essex Crossing is definitely having a positive impact and encouraging developers to 193 HENRY ST. take a closer look at the area,” said 189 EAST BROADWAY An LLC controlled by Daniel Carlos Olson, the Eastern Consolidated Wise bought the 6,372-square- In June 2004, the 7,824-square-foot, eight-unit apart- foot commercial building in broker who is listing 193 Henry with ment building was sold for $700,000 to MDV Realty August 2015 for $4.15 million. colleague Wade Hazelton. Corp., which is controlled by the Tang family. The build- Wise’s purchase of 193 Henry ing includes two commercial units and generated an Small landlords still own many of the closed a week before his pur- estimated $166,810 in revenue before expenses in chase of 201 and 203 East buildings south of the project. On Henry 2014, according to research site Reonomy. Calls to a Broadway. Street, numbers 191, 195, 197, 199, 201 management number associated with the Tangs were not returned. and 203 have not been sold in the past 15 years, according to real estate research site Reonomy. Other buildings on the block and nearby, including Wise’s properties, have seen quite a bit of activity recently. Ⅲ 227 MADISON ST. The city acquired this block-long site in September 1985. It houses the Gouverneur Hospital. The property deed for the acquisition did not list either a price or property-transfer taxes. OASISNYC.NET

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AGENDA TRANSPORTATION TERMINUS: An entrance to the HudsonYards Transit officials preparing plans to bring terminalterminal onon thethe 77 lineline unbuilt 10th Avenue station to life

City asks developers to set aside space for subway entrance BY DANIEL GEIGER

he MTA has The study “looks at ease- can possibly do the [bus] conclusion. It’s some- begun pre- ment volumes so as not to terminal without the [sub- thing we’re pushing liminary preclude the construction way] station,” said Tom for and that there’s ground pedestrian cor- the new 7 line station design work of a new station in the Wright, the president of going to be huge con- ridors equipped with with a future bus ter- Tfor a subway station at future,” he wrote in an the Regional Plan sensus for.” moving sidewalks to minal would offer a 41st Street and 10th email. Association. “Everyone The bus terminal reach Times Square more direct link to the Avenue on the 7 line “I don’t see how you has come to that same could include under- subways. Integrating subway. Ⅲ that was abandoned amid funding worries when the route was extended from Times Square to the Hudson Yards. Construction of the Robert Morehardt CEO 41st Street station has TEC-CAST taken on new urgency as the Port Authority moves forward with plans for a new bus terminal to replace its decrepit bus station two blocks east, at 42nd Street and Eighth Avenue (see story, Page 9), and residents and commercial ten- ants fill the Hudson Yards redevelopment west of 10th Avenue. Planning for the subway stop is described in bid docu- ments viewed by Shaping a Crain’s for a partially city-owned block on Tenth Avenue between bright future. 40th and 41st streets that includes the Covenant House youth shelter. The document says, “The MTA is in the process of preparing the conceptual Understanding design study of the 10th Avenue station for the No. 7 train exten- what’s important. sion.” The MTA’s study will tell bidders how much space they’ll need to leave, and where, for an eventual Tec-Cast prides itself on creating complex aircraft investment castings as well as good jobs in New Jersey. And they were subway station. The looking for a banking partner that could help them continue to grow. At M&T Bank, we took the time to learn the ins and stop was canceled six outs of this specialized business, and are now involved with their expansion plans. Our eagerness to help businesses like years ago over con- Tec-Cast is why M&T is a leading SBA lender1 in the country and why we’ve been recognized by Greenwich Associates for cerns it would add $500 million to the excellence in small business banking.2 To learn how M&T can help your business, visit mtb.com/businessbanking. $2.4 billion 7-line extension. According to several people familiar with the plans, the cost of building the new subway station has now doubled to as much as LENDING SOLUTIONS | MERCHANT SERVICES | TREASURY MANAGEMENT | DEPOSITORY SERVICES $1 billion. The MTA has no Equal Housing Lender. 1According to statistics released by the U.S. Small Business Administration (SBA) for total approved loans through the SBA’s 7(a) lending program during the federal fiscal year ending 9/30/2015. plans to open the sta- 2Based on the 2015 Greenwich Excellence Awards in Small Business Banking. tion at this point, said ©2016 M&T Bank. Member FDIC.

BLOOMBERG spokesman Kevin Ortiz.

APRIL 4, 2016 | CRAIN’S NEW YORK BUSINESS | 7 20160404-NEWS--0008-NAT-CCI-CN_-- 4/1/2016 12:38 PM Page 1

AGENDA ASKED & ANSWERED ENTERTAINMENT INTERVIEW BY ADDIE MORFOOT

ANDREW ESSEX Tribeca Enterprises

ith its January appointment of former journalist We would like to and ad exec Andrew Essex as chief executive, “have a more active Tribeca Enterprises ushered in a new era for the partnership, company that had been run by Jane Rosenthal which would sinceW she, Robert De Niro and Craig Hatkoff founded it after Sept. 11.Three months into his tenure, the Tribeca Film Festival became include more overt embroiled in one of the biggest controversies of its 15-year history support from for including the documentary Vaxxed: From Cover-Up to the city Conspiracy in its lineup. Essex declined to talk about the decision, made after heavy criticism, to withdraw the anti-vaccination movie, but said he did not think it would overshadow other nonfiction fare at the festival, which runs April 13 through 24.

How would you sum up what you are doing on a day-to-day basis? I’m trying to extend the business from a two-week festival to a 365 enterprise, which means finding ways to expand into other cities and extend our relationship with partners.

The film festival was founded in response to Sept. 11 as a way to revive lower Manhattan. That’s been accomplished. What is its mission today? Yes, lower Manhattan is now thriving, and storytelling is thriving, too. So our mission is to tell great stories on every screen and to be synonymous with that kind of narrative excellence.

Does Tribeca ever venture into other neighborhoods in need of rejuvenation? DOSSIER Our nonprofit wing, the Tribeca Film Institute, does amazing work for WHO HE IS Chief all kinds of constituents. Tribeca has brought education programs to executive of Tribeca communities, like Community Screening Series, Moving Image Enterprises, which Blueprint and Tribeca Teaches. We are not just an elite film festival. includes the Tribeca This is for all of New York. Film Festival AGE 50 Would you like the Tribeca Film Festival to become a global event? BORN Brooklyn Tribeca has already been in Doha [the capital of Qatar] and Latin RESIDES Dumbo America, so there is no reason why we can’t continue to take the EDUCATION M.A. in brand into other cities. American literature from New York University Aside from the festival’s having generated $950 million in economic activity LAPSED JOURNALIST and attracted 4.9 million attendees, why is it important to New York City? Essex was executive editor of It brings together a very interesting crowd committed to the arts who Details and an editor at Entertainment Weekly. In the are curious about new forms of storytelling. The Tribeca brand is 1990s, he wrote “Talk of the synonymous with this incredible curation across different platforms. Town” pieces for The New Yorker, including one in 1996 about the How do you respond to critics who say the festival has become unfocused? “Brain Opera,” a $4.5 million event at Lincoln Center We represent storytelling on every platform, and there is a very clear celebrating the convergence focus. This year we have the Tribeca Snapchat Short—that’s a new of art and digital media. screen on which one can tell a story with the principle again that great AD MAN Essex helped turn ad stories can be told on every screen. agency Droga5 into one of New York’s fastest-growing companies. The festival is not subsidized by the state. Would you like it to be? It has twice made Crain’s Fast 50 That’s certainly not a priority right now. That said, we work in perfect list. Revenue jumped 62% in 2015, to $126 million, up from $78 million harmony with the city, but we have never received any money from the the year before. city. We would like to have a more active partnership, which would BUCK ENNIS include more overt support from the city.

In 2014, the Madison Square Garden Co. acquired a 50% stake in Tribeca Enterprises. How will that partnership work? We have a fantastic partnership and have access to their venues, which allows us to put on big-tent events like this year’s 40th anniversary of Taxi Driver at the Beacon Theatre. There are no overt plans for the future except to leverage the partnership more synergistically. Ⅲ

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AGENDA REAL ESTATE

Development Co., a plan to build a stadium New bus terminal may need to seize nonprofit landlord that for the Jets over the owns 38 units of afford- Hudson rail yards. private property on far West Side able housing at 541 Plans to build a new Ninth Ave., which sits bus terminal were Eminent domain could be used to replace worn-out Port Authority station BY DANIEL GEIGER in the path of an accelerated in late expanded bus terminal, March, when Degnan est Side attorney with Manhattan real estate. lenges could add two said he’ll fight. reached a deal with land- Goldstein Rikon Rikon It’s very valuable, and years to the project, he “Our neighborhood other Port Authority lords in & Houghton who spe- it’s going to be serious said. was able to beat a board commissioners the cializes in condemna- money to take it Joe Restuccia, exec- football stadium,” to include the project in pathW of a new $10 bil- tion cases, said, through eminent utive director of the Restuccia said, referring the agency’s nearly $30 lion-plus bus terminal “You’re talking about domain.” Court chal- Clinton Housing to a failed Bloomberg-era billion capital plan. Ⅲ on Manhattan’s far West Side may find themselves facing an attempt by the Port Authority to seize their property using powers of eminent domain, the bistate agency’s chairman said in response to a question from Crain’s. “I’m very hopeful that if eminent domain is necessary— and I’m not convinced it is—it will be Thinking about insignificant,” said John Degnan, chairman of the Port your business is Authority of New York and New Jersey. A little-noticed a big part of ours. provision in a design competition launched in March instructs participants to base PUT OUR TAILORED INSIGHTS TO WORK FOR YOU. their submissions on five broad concepts to To make confident decisions about the future, middle market replace and expand leaders need a different kind of advisor. One who starts by the existing bus ter- understanding where you want to go and then brings the ideas and insights of an experienced global team to help minal at West 42nd get you there. Street and Eighth Avenue, and to use Experience the power of being understood. Port Authority real Experience RSM. estate “where possi- rsm us.com ble, minimizing the acquisition of private real estate.” Each plan differs in size and configuration and would require taking over private property on Ninth Avenue, between West 39th and West 41st streets. “The rules should have read ‘utilizes only currently owned Port Authority real estate,’ ” said Christine Berthet, who co- chairs Community Board 4’s transportation committee. “The Port will strive to have the smallest possible RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax and consulting firms. Visit rsmus.com/aboutus for more information regarding RSM US LLP and RSM International. impact on adjacent properties that we don’t already own,” Degnan said. McGladrey is now RSM. Learn more about our unified global network at rsmus.com/mcgladrey Michael Rikon, an

APRIL 4, 2016 | CRAIN’S NEW YORK BUSINESS | 9 20160404-NEWS--0010-NAT-CCI-CN_-- 3/31/2016 6:52 PM Page 1

AGENDA VIEWPOINTS

NYC RETAIL JOBS Searching for the cause 351,000 of retail’s surprising reversal 291,000 After a six-year gain of 60,000 jobs, the sector has been retrenching in New York City

SINCE THE GREAT ● It’s about minimum wage or paid sick leave. Among these explanations, statisti- economic expan- If employers were convinced there cal noise is unlikely. The IBO used the sion began in New would be a significant increase in the more reliable benchmark revisions for 2009 2015 York City in 2009, minimum wage that they 2014 and 2015 in its analysis. It Source: New York State Department of Labor retail has added couldn’t afford, they would also saw the same pattern in a about 60,000 jobs, cut jobs in anticipation of the broader quarterly survey At some point, online shopping will an eye-opening impact. The sick-leave law 7 through September (the latest reduce the number of stores, but nei- 20% increase in just has been in effect for about data point). Ditto for holiday ther the IBO nor I could find any way GREG DAVID CONSECUTIVE six years. Now, it two years, and stores could be months of retail hiring. to show this statistically. appears, the great compensating for the added job declines from The minimum wage may So for now, let’s blame the tourists. retail boom in the city has come to a cost. August 2015 someday reduce employ- Just ask Tiffany or Macy’s, both of ● screeching halt. The question is why. It’s online shopping’s impact. Source: Independent ment, but the evidence is that whom have attributed their worri- The Independent Budget Office One reason seasonal holiday Budget Office it hasn’t yet. National fast- some sales declines to the drop in noticed the shift as it prepared its eco- hiring was so lackluster in food outlets, which had to tourist spending. nomic and budget update released late 2015 is that brick-and-mortar retailers increase their lowest-paid workers’ But if the decrease in retail jobs last month. It discovered that retail feared how online shopping would cut hourly pay to $10.50 in January, con- accelerates, the change in tourist jobs declined each month from August into their business. tinue to expand in the city, as a report behavior will only be part of the 2015 through February 2016 compared ● It’s tourists becoming tightfisted. by the Center for Urban Future showed answer, and it will be time to revisit with the same months the year before. International visitors continue to flock last year. As for paid sick leave, it is other alternatives. Clothing and accessories stores had the to New York, but they are not spend- hard to believe it is that expensive for biggest losses; restaurants and bars ing nearly as much as they used to, employers, although someone should GREG DAVID blogs regularly at continued to add positions. especially on shopping. study the issue. CrainsNewYork.com. Let’s work through the possible causes: CORRECTIONS collect over half-billion from landlords.” ● It’s just statistical noise. The monthly Jim Cleary founded J.T. CLEARY after starting as a commercial diver in 1981. job numbers from the state Labor Some 75% of the American Lawyer 100 firms use GURINDER “GARY” SANGHA’S Intelligize software, paying yearly subscriptions of $100,000 to $150,000. This His first name and professional background were misstated in the March 28 Department are volatile and often information was misstated in the March 28 Crain’s 40 Under 40. Photo Finish, “Dredging up business.” revised. ● Once an Environmental Control Board violation moves to the Office of AT BARUCH COLLEGE’S ZICKLIN SCHOOL OF BUSINESS, 2015-16 tuition and It’s weakness in holiday hiring. We know Administrative Trials and Hearings, a hearing officer levies penalties or dismisses fees are $17,220, and the average starting salary for 2015 graduates was retailers slashed their normal seasonal infractions. JEFFREY SHEAR is a deputy commissioner at the Department of $70,771. This information was misstated in the March 21 list of the largest M.B.A. hiring last fall. Finance. These facts were misstated in the March 28 “City levies fines, but fails to programs in the New York area.

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AGENDA THE LIST NYC’S LARGEST PUBLIC EVENTS & TRADE SHOWS Ranked by number of attendees in 2015

PUBLIC EVENTS

!" #$%"&'('$& )*+ ,-- %&&&%&&& ! "# $

!" .# /0 123 4')+5/)%" ,-- %&&&%&&& !' ( ) *+ THE SCOOP .'/$3 2+)./ ' $ )*+ ! -- %&&&%&&& "+ ,- . / * he New Year’s +5 /)% '. )'*+ ) # 2&33 -- %&&&%&&& Eve celebration 0 / 1 / * 2 in Times Square is somewhere +5 /)%!" $* $$23 '33&+ 33/5++$ )*+ 232 -- %&&&%&&& 4++/ 0++( . 5++( 6 Tbetween the seventh and 10th most-attended +5 /)% )'66+$ )$'(3 32$333 -- %&&&%&&& annual event in New York 7 . 8 -9 #+8. ( #+ / : 3 City. Yet it is perhaps the $$23 .3$.' $.' 4+".'(3 32232 -- %&&&%&&& most famous, thanks not 8+8# ;+- # + 9 +# /!+ : 3 only to its television cov- erage, but also to its loca- /32762" )*+ -- %&&&%&&& 9+<9= > +<= 1 / 6 tion’s place in the cultural Zeitgeist—a factor that has +5 /)% $.+)$.'/$3 2./ #/5 323$ && -- %&&&%&&& become a blessing and a " (? )8<+ - + 8 5( 8 + curse to the joint operator '7+" 82)+ +5 +)!" (+ 3$2$& -- %&&&%&&& of the holiday ritual. @ :A 8++ 9 ( A / - That’s because Times Square is a business dis- #'$+"+ +5 +) )*+ 3$$&& - &&%&&& B 95(C:8 < 5( > < 3 trict, one of the biggest and most prestigious in )'6+ 4'37 4+".'(3 && 9:- &&%&&& the world. It is run by the @ < < '+ !1 #+ 8 +$ Times Square Alliance, a +)7'* )*+ 32 3 - 2&&%&&& business organization. The 9 .+ C:8 + ! / ! * & plaza that fills with a million people every Dec. 31 +3+6).+ ")+3 )*+ 2 2&& - &%&&& and several hundred * (59, +9+1" (? ) + < + / thousand every other day /)3* '+$ + 4+".'(3 2&& ,-; $%$ of the year is surrounded 7 + : > #+ ( + 1 #+ 3 by towers that house media and law firms, and various other white-collar companies. The tens of thousands of employees TRADE SHOWS who file into these buildings five days a week are < < <<< < < << < more the alliance’s clien- tele than the photo- !!! = !"#"$%< & '( snapping tourists who 1QBDDT8DD(4IQF8IP 47S8IQBPBF@T88C6GE 18HQ'6Q populate the plaza or the $! $)!"*$)+< )>!?<,*@< @<* &<)$<$! $)!"*$)+<#!, !"-#( 12( ! !!! boisterous millennials *#. !"-#<)$</)< *$0 $- B5PF8TVGIC6GE %4I6A! who make the New Year’s )R8PQ8U%87B4"IGRH B86P66GE Eve pilgrimage. )! < @<* &< $!)+< !"$% 3(341 ! !! Which brings us to "I84Q8I&8T3GIC8FQ4D%88QBF@ @FV7E6GE &GS86 Elmo, Spider-Man and < (<, < ) & !<0* <*. (<5"0 #!?+ <6< "0!<7>.. 8 !! 2'(3 !! !!! Hello Kitty. E8I4D7 UHGPBQBGFP FVFGT6GE R@ Costumed characters have been a part of the < (<, < ) & !<0* <*. (<5"0 #!?+ <6< "0!<7"$! 8 !! 29( !! !!! E8I4D7 UHGPBQBGFP FVFGT6GE $4F!85 Times Square scene for years, drawn by the $! $)!"*$)+< *$! ./* ) ?<> $"!> <)" !!! 2( !!! crowds but also a cause of E8I4D7 UHGPBQBGFP B6996GE %4V them. Office employees )!"*$)+< !)"+< )!"*$:#<$$>)+< *$= $!"*$<;<A/* ! 2(291 !!! are not especially fond of &0!!I88E4F FI96GE $4F navigating their way through the bedlam to get , < @<* &<". #< )= +<,*@ ! 4( ! !!! %1 %4F4@8E8FQ FVQBE8P6GE6QI4S8DPAGT $4F to work, the subway or just lunch. Now the . "-)$<$! $)!"*$)+<*?<)" ( alliance is pushing a bill 2GV#F7RPQIVPPG6B4QBGF QGV94BIFV6GE !85 that would restrict the <,*!*+>#<$! $)!"*$)+< *$0 $- <6<A/* !! ( ! !!! characters to a section of E8I4D7 UHGPBQBGFP HAGQGHDRP8UHG6GE '6Q the plaza, ostensibly to protect tourists from being shaken down for tips or (2"09#$7 8'$ 632B 633)0C2 2' 88 2 9$$27 2# 8 8$2 70 2# 97$7 78 %% 6$7$ 6"' $B8$27(@$ 796@$C7 2# 8'$ 1378 "966$28 (2%361 8(32 passersby from being @ (0 !0$ 83 463#9"$ (87 0(787 !98 8'$6$ (7 23 &9 6 28$$ 8' 8 8'$7$ 0(78(2&7 6$ "3140$8$ 3 59 0(%C %36 8'(7 0(78 $@$287 2# 86 #$ 7'3A7 1978 !$ '$0# (2 $A 36) $(8C 20$77 38'$6A(7$ 238$# (2%361 8(32 A 7 79440($# !C 8'$ 1 2 &$1$28 "314 2($7 36 $@$28 36& 2(D$67 2 " 7$ 3% 8($7 $@$287 2# 86 #$ 7'3A7 6$ 6 2)$# 04' !$8(" 00C !C 2 1$ 92#$6 8'$ 7 1$ ogled or groped. 6 2)(2&'291!$6'2(#)38'#(7"037$# *) $78(1 8$'$7$ 6"','$6 0#'"'(%1 2 — ERIK ENGQUIST

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FOOD | CHEESE BIZ

ANY WAY YOU SLICE IT: Rob Kaufelt has broadened the reach of Murray’s gourmet cheeses from Bleecker Street to across the country.

alty. Smooth. Sharp. Smoky. Many of Gennaro and Carmela Sbarro started selling the words applied to the selections at slices of pizza in America’s malls. More recent- Murray’s Cheese could also describe ly, Danny Meyer turned a kiosk in Madison CHEESE its owner, Rob Kaufelt, the longtime Square Park into an international chain of pub- proprietor of the shop that has been licly traded Shake Shacks. on Bleecker Street since 1940. “Murray’s didn’t just ride the wave, they WHIZ That stretch of Bleecker in Green- made the wave,” said Burt Flickinger, a food wich Village, between Sixth and Seventh avenues, consultant. Sstill includes Ottomanelli Brothers butcher shop, Cheese didn’t always look like a smart move. How Rob Kaufelt Faicco’s Italian Specialties and Pasticceria Rocco’s In the days before kale and quinoa, people transformed Murray’s on sweets. The block provides a taste of Old New barely knew what arugula was, let alone an aged York of which Kaufelt is very proud. Comté or Fiacco di Capra. Kaufelt, the son of a Bleecker Street into “We’re taking the neighborhood national,” grocer, recalls his father’s horror: Who could America’s Apple Store of he said in November, on the occasion of the ever make a living selling just cheese? But opening of the 241st Murray’s cheese stand instead of following in his father’s footsteps, fromage, generating sales inside a supermarket—this one in Portland, Ore. Kaufelt cut his own path. of $250 million a year Murray’s widest distribution is with Kroger, “We are all about education,” Kaufelt, 68, the Ohio-based supermarket chain, in 11 states. said. “We’ll teach you. We’ll tell you what you There are now mini-Murray’s in 30 states, want to know. We’re not just cheese people. We BY RICHARD MORGAN including its second New York outpost, in Grand know how dry the grass is in France—that’s the Central Market, and the company’s annual sales level of knowledge here.” top $250 million. That’s a significant share of the $3.7 billion gourmet cheese market, according to The impresario of cheese the Specialty Food Association, which pegs Indeed, Kaufelt was not exaggerating when he cheese at the top of the fast-growing, $100 bil- said, “We invented a new career path, like som- lion artisanal food industry. melier. You can be a CCP now, a certified cheese “Supermarkets have gotten complacent,” said professional.” Of about 3,000 people who have Greg Blais, cheesemonger at Eataly and host of gone through Murray’s training, 52 are CCPs. the Cutting the Curd podcast. “Murray’s comes “Murray’s is The Beatles of cheese. And that in and forces everyone to step up their game.” makes Rob the Brian Epstein,” said Steven As of the end of February, Kroger had 257 Jenkins, citing the epic British band’s manager. Murray’s shops, with an additional 100 planned “He’s not the rock ’n’ roll celebrity. He’s the by the end of the year. businessman. He has the impresario gene.” “We wanted to up our credibility,” said Jenkins should know. He was a longtime cheese- Margaret McClure, Kroger’s former corporate monger at Fairway who won a James Beard Award vice president of deli/bakery and now a regional for Cheese Primer, a seminal book in the field. vice president of operations. “Think of pharma- When Kaufelt took over Murray’s in 1993, he cists, or baristas, or the Apple Genius folks. hired Jenkins as a consultant to get up to speed. That’s what Murray’s gave us.” Jenkins compared the transformation of Murray’s expansion is among the biggest Murray’s under Kaufelt to the rebranding of the mass-market moves in the New York food Patagonian toothfish as Chilean sea bass.

BUCK ENNIS world since the 1970s, when Brooklyn’s “Remember Barneys?” Jenkins said. “Barneys

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used to sell discount suits. Then the son took the shop to his Calabrian over and decided to class up the place. That’s clerk, Louis Tudda, who MURRAY’S TOP SELLERS IN 2015 what Rob has done.” sold it to Kaufelt in the Certainly there are other gourmet cheese shops early ’90s. Since then, in the city. The revolutionary gourmet food store Kaufelt has expanded the Fromager d’Affinois Mozzarella 80,000 lbs. Dean & DeLuca formed in 1977 when Giorgio business by riding a pub- 200,000 lbs. DeLuca merged his cheese shop with Joel Dean’s. lic embrace of gourmet But Murray’s got to cheese first. cheese that Murray’s “For a really long time, they were the only itself has helped foster. game in town, and so they provided a lot of Throughout its 76-year appetite for a lot of people,” said Anne Saxelby, history, it has changed the cheesemonger of a namesake shop in Essex buildings twice, but Street Market and herself a graduate of what she always stayed at the calls Murray’s “boot camp.” intersection of Bleecker As that appetite has grown, so has Murray’s: It and Cornelia streets. opened an in-store classroom for cheese lessons Kaufelt lives in in 2004; the fast-casual grilled-cheese line Greenwich Village with Murray’s Melts in 2009; and Murray’s Cheese Bar, his wife, their 9-year- Parmigiano- Reggiano Double an adjoining eatery billed as “a temple to old son and 6-year-old Gruyère 150,000 lbs. crème Brie cheese,” in 2012. twins. He is far less Irish Cheddar, 125,000 lbs. The business also has a lesser-known secret fussy than his cavemas- (tie) 100,000 lbs. weapon: an in-house superhero working ter. “It’s gotten to the valiantly out of a cave in Gotham. point where we just put ‘cheese’ on the grocery list,” he said, “and roll him. “My dad came up three weeks ago for his In the vaults the dice on whatever the nanny brings home.” 95th birthday,” said Kaufelt. “For the first P.J. Jenkelunas has the unique job title of cave- He still aims to change hearts and minds (and time—proving it’s never too late—he said, ‘I just master. He works in a Long Island City warehouse markets), but his biggest struggles are behind want you to know I’m very proud of you.’” Ⅲ where Murray’s fulfills orders from California to Calabria, in chambers kept at 90% to 95% humidity and 57 degrees Fahrenheit. Jenkelunas rattles off not just the charming names of the cheeses themselves, but also the Greco-Roman muddle of the various molds abounding in them: the blood-red Brevibacterium linens; the yellow Chrysosporium sulphureum; the glowing, chalky Penicillium catenatum. There are as-yet-unnamed cheeses aging there, as well as cheese experiments (beer-aged versus sherry-aged, for example). There’s a cheese, Hollander, named for a former cavemaster—well, his middle name. “We were not about to call a cheese Brian,” said a publicist. (Although there is a cheese named Other Stephen.) “We’re trying to develop New York cheddar,” said Jenkelunas as he checked on a young Greensward wrapped in spruce bark. “Well, a good one.” Before the vaults filled with pyramids of vegetable-ash-coated Valençay, there was, of course, a real Murray. Murray Greenberg passed on

ARTIST’S TOUCH: Cavemaster P.J. Jenkelunas oversees the aging of Murray’s cheeses. BUCK ENNIS

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JOB TRAINING | REMAKING WORKFARE MAKING WELFARE TO WORK, WORK The mayor turns to a onetime rival to reimagine job training for the poor. But is the city willing to pay for what employers really need? BY LESLIE KAUFMAN SANDRA CHEVALIER took advantage of new rules hanta Owens was back in one of the many job- allowing welfare recipients to training sessions she’s been forced to attend in the 15 go to school while collecting years she’s been on welfare. Only this time, instead benefits. She’s now at LaGuardia Community College. of handing out job listings, the instructor gave her a piece of chocolate. “Sometimes in our life, things can be rough,” the teacher, Brynn Wallace, said, “so we need to remember to slow down and enjoy the good moments.” Owens, a 49-year-old mother of six, has cycled through job-training classes with little to show for them. “There were no jobs,” she said. “They just wanted you to sit around.” SThen the de Blasio administration offered her a chance to join an employment-training service that aims to get its clients not just any job, but one that gives them the interpersonal skills that can move them beyond low-skill, minimum-wage work. The nutrition counseling, com- puter literacy, long-term mentoring and, yes, mental-health assistance go well past the basics needed for entry-level work. Even the name of the service is nurturing: the Hope Program. Owens, who is training to get her food-handler license because she dreams of a job at Costco, said her favorite part of the Hope Program has been its counseling on emotional health. As sun streamed through the windows in the small office in downtown Brooklyn, she unwrapped her chocolate and took a deep whiff. “In my culture we don’t talk to thera- pists and counselors, we talk to the pastor,” Owens explained. “I am nor- mally not one to open up, but when I met the counselor it was like a weight lifted off my shoulders.” Such a touchy-feely approach to public assistance would have been year passed before they issued the request for proposals and the new met- unfathomable under Mayors Rudy Giuliani and Michael Bloomberg. But rics by which programs would be judged. Contractors were given less since taking office two years ago, Mayor Bill de Blasio, and his commis- than eight weeks to prepare their bids. sioner of human resources, Steve Banks, have used this model as they The effort, even at this early stage, has been met with skepticism. remake the $200 million system intended to move roughly 54,000 able- Conservatives say it will bring back a culture of dependency. Businesses bodied New Yorkers from welfare to work. fear it won’t turn welfare recipients into reliable workers. And job- They are phasing out the signature Giuliani program that required wel- training nonprofits warn that they are being insufficiently funded. fare recipients to do community-service-type work in exchange for their Alan Momeyer, who recently retired as vice president of human government check, and have late- resources at Loews Corp., which ly reduced the number of clients occasionally employs former wel- punished for missing city-man- “IT’S NOTA PRIORITY FOR US THATTHE fare recipients for its hotels, says dated meetings intended to get CITYTRAIN PEOPLE. WHATWOULD BE the city must do more after its them back to work. trainees land a job. Many have At the end of February, the de HELPFUL IS AFTER THE PERSON STARTS. challenging circumstances in Blasio administration requested IT’S THEN THATTHERE ARE ISSUES” their lives or don’t understand new proposals from welfare- the cultural norms of a profes- employment trainers. Vendors sional workplace. They don’t will have to assess each client’s educational needs and career ambitions, need skills so much as continuing guidance and support. and ideally offer individually tailored programs. “It is not a priority for us that the city train people. We will do that— The ambition behind the massive rebidding process is to reduce the we have our own, very specific standards,” Momeyer said. “Where the city’s poverty rate, which has hovered stubbornly at about 20% for more nonprofit world would be much more helpful is after the person starts. than a decade. Banks is seeking to change a system focused on getting It’s then that there are always issues. If you’ve been on welfare a long people from welfare to work as fast as possible into one that, as he puts it, time, working requires adjustments, like getting along with the boss and emphasizes “quality jobs with sustainable wages.” co-workers and getting to work on time.” To achieve this goal, training contractors will be measured with tough new metrics, including how long recipients stay in the jobs in which they are placed. Banks would like to see 80% still in their positions after 180 days. By HEN GIULIANI TOOK OFFICE IN 1994, 1.1 million New Yorkers—nearly industry standards, that’s asking for the moon. The new system would triple one in six city residents—were on welfare. The mayor and his HRA New York City’s current number, according to one independent study. Wcommissioner, Jason Turner, blamed fraud and a system of per- Banks and de Blasio have talked up their efforts to consult employers verse incentives that handed out checks without insisting that the able- and promised big changes to the system, but they have moved very delib- bodied try to work first.

BUCK ENNIS erately. After they introduced the concept behind the revamp, nearly a In Washington, President Bill Clinton—pushed by a new Republican-

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controlled House of Representatives—promised to “end welfare as we know it.” Congress passed a controversial reform limiting welfare to five years and creating financial incentives for states to move people off the rolls. But municipalities and states could continue funding benefits indefinitely. New York City and state both did. Giuliani, however—embracing what his fel- low Republicans in Washington were doing— found other ways to reduce the rolls. He made benefits recipients submit to fingerprinting and report to welfare centers—which he renamed job centers—and, most famously, began making able-bodied but unemployed recipients do tasks STEVE BANKS circa 1992. Then, he fought Giuliani’s welfare policies; now he’s implementing his own. such as raking leaves in parks. One effect of the “workfare” mandate was immediate: Recipients who had off-the-books one of the new cohort. A foster child who never fin- studying to be a veterinary assistant. In addition jobs conflicting with their new assignments had ished school, she had always loved animals. When to receiving welfare, she earns $10 an hour to choose one or the other; an untold number she had a family of her own and went on welfare, mentoring other students who are on welfare. chose their jobs. Bloomberg largely continued she said, she decided she wanted an education but “Before I was having trouble paying the rent,” the policy. During the two mayoralties, the had no time as a clerical assistant under workfare. she said. “Now I can focus on my studies.” monthly count of New Yorkers on welfare Under the new program, she earned a high- The new leniency, however, has been just declined by two-thirds, or more than 700,000. school equivalency diploma and now attends what the mayor’s conservative critics feared— One man, however, fought the new rules— LaGuardia Community College, where she is CONTINUED ON PAGE 16 often successfully. The attorney-in-chief of the Legal Aid Society brought lawsuit after lawsuit against the Human Resources Administration. He alleged it was illegal to make welfare appli- cants spend a day at a job center looking for work before they could apply for benefits; he We are 12,000 Security Officers won. He charged the city couldn’t force disabled recipients to use job centers far from their house, and won again. He sued so often that Who Are Always There both Giuliani and Bloomberg frequently singled out the lawyer for criticism. We work hard to protect some of the city’s most iconic sites, including the His name was Steve Banks. No one could have predicted that the bane of Statue of Liberty, the 9/11 Memorial, Rockefeller Center and hundreds of other HRA’s existence would one day run the agency. office, university, federal and municipal buildings across New York City. But in hiring Banks in February 2014, the mayor—who had edged Banks in a 2001 race for a Brooklyn City Council seat—could not have made a stronger statement about his predecessors’ policies for the poor. When Banks was appointed, longtime staffers at the agency—which runs the city’s biggest poverty programs, namely food stamps, Medicaid and welfare—were shocked. Their longtime nemesis was suddenly their boss. Lisa Fitzpatrick, a 30-year veteran of the agency and now its first deputy commissioner, said she and her colleagues knew it was time to “brace for change.”

ANKS AND DE BLASIO consider entitlements to be just that, and that people should be Bhelped instead of thwarted to get everything they legally can. Banks has taken steps to ease barriers to a wide range of benefits, such as adding kiosks and phone apps that let individuals apply for food stamps without visiting an office We are always there to keep millions of New Yorkers safe. We are asking for a and waiting in line. Under Giuliani and Bloomberg, missing one appointment could result fair contract with good wages and family health care so we can support our in a suspension of cash. Banks gives five sick days. families and all of our communities as well. Banks is also aggressively taking advantage of a change in state law that allows welfare recipients to attend college for four years while still receiving benefits. It was a major shift, but New York was merely bringing itself in line with other liberal states that have allowed more training and education for years, said Elizabeth Lower-Basch, #AlwaysThere director of the income and work supports team at 32BJSEIU the Center for Law and Social Policy in Washington. “New York, in the past, has stood 32BJSEIU out as using workfare much more than other www.SecurityAlwaysThere.com 32BJ SEIU is the largest property service workers union in the country. 32BJSEIU 25 West 18th Street, New York, NY 10011 • www.seiu32bj.org places,” she said. “That was quite unusual.”

REDUX, NEWSCOM Sandra Chevalier, a single mother of five, was

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JOB TRAINING | REMAKING WORKFARE

and they have attacked. “De Blasio’s new welfare plan: Anything to stop people from getting a job,” screamed a New York Post headline on a column written by Heather MacDonald, the Manhattan Institute’s welfare expert. “Welfare users will no longer be expected to immediately look for and take a job in exchange for taxpayer support,” but instead “will serve indefinitely as receptacles for an endless array of taxpayer- supported services,” MacDonald wrote. In the two years after de Blasio became mayor, the number of people receiving month- BRYNN WALLACE teaches a ly benefits rose by nearly 24,000, to 358,000. class on wellness at the Hope Program. To Banks, that does not indicate a rise in free- loading. He said his predecessors kept the number artificially low by chasing people off the rolls, only to see them return by appealing to the state. The more honest number, he said, is how many clients receive cash assistance at some point in an entire year. That figure, roughly businesses, even in fields accustomed to it, such tle money. The average cost for a student to go to 500,000, has not changed in nine years. as retail, hospitality and fast food, where many a service-rich provider like Hope is between “All the prophecies of doom and gloom have welfare recipients find work. The cost to socie- $5,000 and $6,000, but the city’s new bidding not come to pass,” said Banks. “There is no evi- ty is steep, too, not just in terms of welfare pay- process offers far less, depending on the services. dence we are increasing dependency.” Nor is ments but all the other assistance that low- In March testimony to the City Council, Mary there any that his department is reducing it. income families get, such as housing subsidies, Ellen Clark of the NYC Employment Training The Independent Budget Office recently report- food stamps and health care, and the lack of Coalition said that programs were being asked to ed that it’s too soon to judge how things are income-tax revenue they generate. do more, but with potentially less money. Career going under Banks’ leadership. To reach the city’s goal of 80% retention, programs that typically cost between $1,000 and If there are more people on welfare and they Banks has his eye on a larger number of small $2,400 now—and can go as high as $7,000—are are staying on it longer, it is because they are vendors training people outside the city’s being funded at an estimated $931, she testified. more engaged, Banks offered. “The idea that we purview. The Hope partnership began last year Louis Miceli, executive director of are not asking people to work could not be fur- when Banks asked the Robin Hood Foundation JobsFirstNYC, which finds employment for at- ther from the truth,” he said. to recommend programs with strong records. risk young adults, called the city’s offer “woe- Last July, as a test, the city began sending fully insufficient.” “Despite lots of thoughtful- clients to the smaller agencies. Some 100 people ness on the planning side, it is really more of the HE VAST MAJORITY of New Yorkers on wel- are spread among 10 different providers, which same,” he said. “To get the kind of readiness fare are children, elderly or disabled and took the clients at their own expense. and training support for the people typically Tcan’t work. Of the roughly 89,000 adults Hope serves only 300 new people a year, so it coming from this type of background is expen- who can, 27,000 are employed but earn so little can offer the kind of personalized attention that sive.” that they still qualify for benefits, and an addi- the city believes will lead to jobs that can lift Hope’s Mitchell said the cost of her program tional 7,000 are in drug-treatment programs. people out of poverty. The program has a high is high compared with what the city is accus- Almost all the political Sturm und tomed to spending, but the payoff Drang about welfare focuses on would be worth it. “If you meas- some 54,000 unemployed able- “ALLTHE PROPHECIES OF DOOM AND ure the number of people who bodied adults on the dole. Banks’ stay successfully employed for a toughest challenge has been GLOOM HAVE NOT COME TO PASS. year, it makes sense,” she said. “If moving them into jobs. THERE IS NO EVIDENCE THATWE ARE the trainees aren’t staying For many years, about a half- employed for a year, what is that dozen contractors handled almost INCREASING DEPENDENCY” cost to society?” all of the city’s welfare-to-work The Community Service training. According to one of them, Society of New York once deter- they were paid about $2,600 per person. Banks number of staff relative to the number of mined that when someone fails to graduate from said this has not been money well spent, calling enrollees, and offers stipends and rewards for high school or get a GED, the average cost to the programs job-training factories that offer graduates who get jobs and stay in them. Other taxpayers exceeded $300,000 during the course one-size-fits-all services for employable high- extras include trips to a farmers’ market to learn of his lifetime. But data on the effectiveness of school graduates as well as those who can’t read about the benefits of fresh vegetables. the city’s programs for welfare recipients is hard or write. Hope’s executive director, Jennifer Mitchell, to come by. For all the attention Giuliani got for The efficacy of the city’s welfare contractors said it follows trainees even after they get jobs the plunge in welfare recipients, the has long been debated. Under Bloomberg, HRA and counsels them on everything from dealing Independent Budget Office said it could not get reported that 75% of welfare recipients who were with bosses to replacing dirty uniforms. “A lot enough information near the end of his tenure in placed in jobs kept them for at least 180 days. of places are a Band-Aid,” she said. “When 2001 to determine the effectiveness of his HRA says the retention rate is now closer to 65%. you’re with Hope, you’re with Hope for life.” efforts. Many of the providers that have done the con- Of course, welfare recipients are notoriously Banks acknowledged that the funding being tract work believe Banks is fixing something that difficult to track once they leave the rolls. When offered is not what everyone wishes but said his wasn’t broken—at an unnecessary cost to taxpay- Crain’s tried to follow up with Shanta Owens agency is preparing to supplement it with sup- ers. They say the 75% success rate should be a several months after visiting her at Hope, she port that might not be readily apparent: more point of pride. “I don’t think anyone—whether had moved on, and the program could not find city agencies or contractors required to hire or larger or smaller or nonprofit—can do much bet- her. A spokeswoman said the program has at least review welfare recipients, more job- ter than that,” said one executive, requesting since been in touch with her and continues to search assistance from city agencies such as anonymity for fear of angering City Hall. reach out to offer her help with job placement, Small Business Services and more money to the However, doubts have been raised about the retention and advancement. City University of New York for schooling. city’s numbers. An independent investigation “A whole new architecture is being built,” in 2008 by Community Voices Heard—a non- Banks said. “Let’s give it time to work.” Ⅲ profit that advocates for more training and edu- MPLOYMENT TRAINERS are excited by City cation—found that three of every four trainees Hall’s change in direction—they believe This article was written with the support of a grant placed in jobs lost them within six months. Ewholeheartedly in the mission—but most from the Urban Reporting Program of the CUNY

BUCK ENNIS That’s a crucial statistic. Turnover costs worry that the city is asking too much for too lit- Graduate School of Journalism.

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GOTHAM GIGS

DOCTOR STRING GLOVE: John Colomb repairs about 10 baseball gloves a week in his Brooklyn workshop.

The Glove Doctor is in John Golomb resuscitates old baseball mitts

ohn Golomb runs a one-man business from the toward rejuvenation. “That’s the magic I put back JOHN GOLOMB basement of his home in Brooklyn, restoring into a glove,” said Golomb as he punched holes in used and beloved baseball gloves. And, every the lining and added grommets for the lacing. spring, as Opening Day approaches, business “Giving it a second life.” AGE 62 J for the Glove Doctor picks up. Golomb got into baseball gloves through boxing. BORN Port Washington, L.I. “The whole thing about the glove is the out- His grandfather Jacob grew up promoting fights on RESIDES Brooklyn side,” Golomb said on a recent after- the Lower East Side and founded EDUCATION B.F.A. at Syracuse, noon. He grabbed a Priority Mail box “My customers Everlast, the boxing equipment firm. and more than 13 years in the from a pile stacked on a workbench and love their John worked there for more than a decade Everlast factory in the Bronx pulled out a glove that was dusty gray out of college, overseeing the production MAJOR LEAGUE ACTION from decades of infield dirt. With a pair baseball glove, of punching bags and designing custom A Yankees trainer brought third base- of snippers, he cut through the stitching, and I keep boxing gloves for Muhammad Ali, Joe man Wade Boggs’ prized glove to and used needle-nose pliers to pull out Frazier and Mike Tyson, and safer thumb- Golomb to repair. “He’d been using them going the same glove for 13 years, and it the fine threads on the edging. ” less equipment for the Olympics. Golomb looked like he’d been bringing it to Next he took apart the lining—usually left Everlast in 1987 to focus on baseball. the shoemaker for repairs. I made an a piece of thin leather that sits between the back of (The family sold Everlast in 1995, and the factory shut all-new glove on the inside, and then the hand and the thick outer leather—pulled out the in 2003, unable to compete with Chinese imports.) the Yankees went on to win the World felt finger pads that protect a hand from a hardball, He has developed an ambidextrous glove, and can fix Series,” said Golomb. Yankees short- and cut the stitches holding together the two halves leather footballs and basketballs, or whip up a pair of stop Derek Jeter once overnighted him a glove that had gotten torn in of the glove. Later he’ll wash the disassembled glove custom boxing gloves. spring training. It was back in Tampa with special soap, air-dry it and restore the leather But his first love is repairing worn gloves. “Boxing 24 hours later. with oils and creams. equipment gets beat up, but it’s not the same with a HISTORY Golomb created a base- He traced the old lining onto a new piece of baseball glove,” said Golomb. “My customers love their ball glove exhibit for the Yogi Berra leather, to replicate the glove’s exact stretch, then baseball glove, and I keep them going.” Museum in Little Falls, N.J.

BUCK ENNIS cut it to shape with heavy shears, the first step — PETER S. GREEN

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SNAPS

An all-star roster of chefs bring their talents to Citymeals benefit There was no rubber chicken at the March 13 Citymeals on Wheels benefit. Some of the city’s most celebrated chefs and restaurateurs came together at Daniel Boulud’s namesake eatery to prepare a feast that included delicacies such as poached lobster, foie gras, black truffles and citrus-cured fluke. The Sunday-night supper raised nearly $840,000 to prepare and deliver some 130,000 meals to homebound, elderly New Yorkers.

Marcus Gleadow-Ware, executive chef at Aureole, Charlie Palmer, restaurateur and Citymeals board member, Frank Castronovo, chef and co-owner at Frankies Spuntino, Daniel Boulud, Citymeals’ Aaron Goldman, principal at General Atlantic board co-president, and Frank Falcinelli, Frankies’ and Citymeals board member, and his wife, co-owner, at the fundraiser. Stephanie Goldman, at the event.

Jonas Center raises funds for veterans Barbara and Donald Jonas, co-founders of the Jonas Center for Nursing and Junior League Veterans Healthcare, and Darlene Curley, its executive director, at a March 18 rakes in record fundraiser at the Rainbow Room. The fete raised more than $600,000. $600K

Elizabeth Quinn Brown, features editor of Quest magazine, and Arielle Patrick, a group manager of Weber Shandwick, at the Junior League benefit. The event took in a record $600,000 for the women’s organization, which works to enrich communities through volunteerism.

Lauren Jenkins Chung, director- at-large of the New York Junior League board of directors and her husband, Richard Barbara Thibault and Chung, a director her husband, Dr. George at Barclays, at the Thibault, president of March 5 fundraiser the Josiah Macy Jr. for the Junior Foundation, at the Jonas League at the Center’s event. The Pierre Hotel. organization provides scholarships and training for nurses and nursing teachers, and for health care professionals who treat veterans. SEE MORE OF THIS WEEK’S SNAPS ONLINE AT CRAINSNEWYORK.COM/SNAPS

PATRICK MCMULLAN, GABBE ERIC VITALE,BEN GET YOUR GALA IN SNAPS. EMAIL THERESA AGOVINO, [email protected]

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FOR THE RECORD*

ruptcy on March 16. The April 18 for the recon- ing. The tenant was NEW IN TOWN COMPANY MOVES filing cites estimated assets struction of paths, site REAL ESTATE DEALS represented by Colliers and liabilities of $1,000,001 furnishings and landscap- International’s Robert Deepcover Bottega Veneta to $10 million. ing at Crescent Beach COMMERCIAL Kennedy. The landlord, 162 Allen St. 650 Madison Ave. Park, located at Tennyson The Women’s Refugee Quartz Realty, was The clothing store opened The luxury-goods retailer Miner Labs Drive between Armstrong Commission signed a 10- represented by ABS Partner on the Lower East Side. opened its third city loca- 137 Varick St. and Wiman avenues on year lease for 8,905 square Real Estate’s Andrew Udis The men’s vintage shop tion, on the Upper East Filed for Chapter 7 bank- Staten Island. Contact feet at 15 W. 37th St. The and Ron Zimmerman. The sells snapbacks, graphic Side, replacing the former ruptcy on March 11. The fil- Michael Shipman at nonprofit humanitarian asking rent was $55 per T-shirts, jerseys and vari- flagship at 699 Madison ing cites estimated assets of (718) 760-6705 or group will occupy the square foot. ous clothes from the 1990s Ave. The temporary shop $0 to $50,000 and estimat- michael.shipman@ entire ninth floor of the collections of Tommy offers men’s and women’s ed liabilities of $1,000,001 parks.nyc.gov. 16-story building between RETAIL Hilfiger, Calvin Klein and leather goods, ready-to- to $10 million. The creditors Fifth and Sixth avenues. Lenny’s Group signed a Polo Ralph Lauren. wear, jewelry, shoes and with the largest unsecured GOODS AND SERVICES Cushman & Wakefield’s 12-year lease for 6,100 fragrances. Its permanent claims are SPG Miner, owed Department of Health Carri Lyon and Daniel square feet on the street Le Coq Rico “New York Maison” will $500,000; Select VP, owed and Mental Hygiene Ogan represented and basement levels at 30 E. 20th St. open on Madison Avenue in $250,000; and DreamIt Seeks competitive sealed the tenant. Kamber 2565 Broadway. The Michelin-starred chef mid-2017. Fund II, owed $120,000. bids by 11 a.m. on April 29 Management’s Steven sandwich shop will occu- Antoine Westermann for maintenance, inspec- Levy represented the py the base of the 35- opened his first restaurant Prime Chef Club Room tion testing, emergency landlord in-house. The story residential tower in New York City, in 1202 Ave. J, Brooklyn GOVERNMENT CONTRACT and repair services, and asking rent was in the between West 96th and Gramercy. The menu fea- Prime Hospitality Group, a OPPORTUNITIES modernization of elevators $40s per square foot. West 97th streets. The tures sustainably raised high-end kosher restaurant and wheelchair lifts in tenant was represented by domestic poultry. Brunch, group, opened an eatery in CONSTRUCTION SERVICES DOHMH-owned or NinthDecimal signed a Ken Realty Corp.’s lunch and dinner options Flatbush. Twice-weekly City University -operated buildings three-year lease for 5,500 Kimberly McCullough. are available. tasting menus are offered of New York throughout the five square feet at 16 E. 40th The landlord, Friedland on Thursdays and Sundays, Seeks competitive sealed boroughs. Contact St. The San Francisco- Properties, was repre- Simple Syrup and cooking classes and bids by 3 p.m. on April 21 Michael Santangelo at based tech company will sented in-house. The 810 Nostrand Ave., private events are available. for the repair of the thresh- (347) 396-6671 or occupy part of the fourth asking rent was not Brooklyn Tasting dinners cost $75 per old at Bronx Community [email protected]. floor in the 12-story build- disclosed. The wine and spirits shop person and are limited to 20 College’s Gould Memorial will open in Crown Heights guests per night. Library. Contact Anjanette later this spring. The bou- Antonio at (718) 298-5801 GET YOUR NEWS ON THE RECORD tique shop will offer a large or anjanette.antonio@bcc To submit company openings, moves or real estate deals, or to receive further information, selection of locally sourced BANKRUPTCIES .cuny.edu. *email [email protected]. Brooklyn and New York For the Record is a weekly listing to help businesspeople in New York find opportunities, state wines, as well as Jairrabrandy Realty Department of Parks and potential new clients and updates on customers. Bankruptcy filings from the Eastern and tastings and “Wine 101” Enterprises Recreation Southern districts of New York are listed alphabetically, as are recently announced New York classes, according to owner 9304 Ave. A, Brooklyn Seeks competitive sealed City agency contract opportunities. Real estate listings are provided in order of square footage. Michael de Zayas. Filed for Chapter 11 bank- bids by 10:30 a.m. on

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PHOTO FINISH

Sign of the times n a Monday in March, com- muters stepped off the 7 train in Sunnyside, Queens, passing the Statue of Liberty—in sunglasses Oand on his cellphone—offering a $100 advance against their tax refunds through returns prepared nearby at Liberty Tax Services on 47th Street. Each of New York City’s 163 Liberty locations—some of them open only for a few months each year—hires its own placard holder, some of whom make a commission on each filing. The statues aren’t the only ones making money during tax time. The ranks of tax preparers swell to more than 2,400 in New York City around Jan. 15. Tax preparation professionals, a separate occupation from accountants, made an average of $33.53 per hour in 2014, according to the Bureau of Labor Statistics. Some of these prep pros are seasonal hires who have recently finished accounting degrees, said Ahmed Abdelhalim, who teaches accounting at LaGuardia Community College. Others are accountants who pad their full-time work- load during tax season. Despite ample options for filing without charge, including the IRS’ Free File program, 56% of Americans used paid preparers in 2013. In New York City, more than 150,000 taxpayers filed through free services in partnership with the city, more than 50% more than the year before, according to the Department of Consumer Affairs. — PETER D’AMATO PETER D’AMATO

APRIL 4, 2016 | CRAIN’S NEW YORK BUSINESS | 23 Now is the time for agility. Now is the time for T:14”

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